Coalition vows to scrap housing tax reforms and limit migration to supply

In his speech, which largely focused on curbing migration and prioritising ‘Australian values’, Taylor set out a range of measures to reduce demand for housing and bring about supply.

Capping migration to new-build completions

In his speech on Thursday evening (14 May), Taylor announced that a future Coalition government would cap immigration numbers based strictly on the number of dwellings built each year to ensure the “Australian dream” remains attainable.

Each year, the Minister for Housing will report to Parliament on the number of new homes completed. That number will then set the ceiling for net overseas migration in the following year.

“Never again will a government be able to bring in more people than our housing can support,” Taylor said.

He said that immigration would need to be significantly below the cap in the first few years of a Coalition government to “allow the housing market to catch up”, though exact figures wouldn’t be known until closer to the next election (May 2028).

“If Australia does not build enough homes, migration must come down,” he said.

“Mass migration is changing Australia for the worse… the number of people coming in far exceeds the number of houses built,” Taylor said in his speech.

“With Labor having opened the migration floodgates, the dream of home ownership has become a nightmare.

“Consequently, the great Australian dream of home ownership is vanishing for old and new Australians alike.”

Scrapping CGT and negative gearing reform

As well as curbing migration numbers to reduce housing demand, the Opposition Leader said that the Coalition would repeal the new negative gearing and capital gains tax (CGT) changes if it were elected into power.

According to Taylor, the new tax changes would “reduce the number of houses available for young Australians to buy or to rent”, “hand over housing investment to multinationals and foreign pension funds”, and “discourage the investment Australia needs to grow”.

He said: “The Treasurer’s higher taxes aren’t economic reform. They’re an assault on aspiration. They’re an attack on the wealth creation that benefits us all.

“They will crush the ‘reward for hard work’ spirit that underpins our nation’s success. And so, the Coalition will fight like hell to prevent Labor’s toxic taxes from becoming law. But if they do, I commit that a Coalition government I lead will repeal them.

“Labor is locking out young Australians from the opportunities afforded to older Australians to build wealth and prosperity to get ahead.

“This Prime Minister is one of the many Australians who has benefited from these opportunities.

“Now he is pulling up the ladder of opportunity for the next generation not only by whacking higher taxes on housing but also on their savings, investments, and small business.

“When government whacks a tax on something, you get less of it.

“Less housing, less savings, less investment, and less small business for the next generation.

“Labor’s Budget isn’t intergenerational fairness – it’s intergenerational fraud.”

Prioritising housing for Australian citizens

The budget reply also sets out the Coalition’s vision of prioritising taxpayer support for home ownership for Australian citizens.

To “re-establish home ownership as the centrepiece of the Australian dream”, Taylor reiterated the Coalition’s pledge to limit the 5 per cent Deposit Scheme to citizens only, stating that the scheme has been used by around 50,000 non-Australians.

He also said that the Coalition would scrap build-to-rent tax breaks for multinationals and wind back the Housing Australia Future Fund, which he deemed to be “ineffective”.

Improving supply

On Thursday evening, Taylor lambasted the delays to housing supply, levelling the blame at the Albanese Government’s feet, saying: “Government-led housing programs have seen 30,000 fewer homes built each year.”

He unveiled plans for a housing supply package, including a $5 billion Housing Infrastructure Fund to unlock up to 400,000 homes by funding “critical last mile infrastructure such as water, sewerage, power and access roads”. The federal government this year pledged $2 billion for a similar fund.

The Coalition said it would also “slash the National Construction Code”, while preserving core safety standards, to reduce the cost of building a new home by up to $70,000.

Expanding the IAWO

Outside of housing, Taylor outlined that he would also expand the instant asset write-off (IAWO) for small businesses with a turnover under $10 million to $50,000 on a permanent basis. This is up from the $20,000 IAWO that the federal government has said will become permanent.

Other policies announced in the budget reply include:

Economic and Taxation Policy

• Income Tax Indexation: Starting in 2028-29, the bottom two income tax thresholds will be indexed to inflation. By 2031-32, indexation will extend to the top two tax thresholds.

• Tax Back Guarantee: Implementation of a guaranteed tax return framework.

• Regulatory Reform: Regulators will be required to prioritise competition, investment, productivity, and wage growth.

• Legislative Simplification: A comprehensive review and simplification of the Corporations Act, Tax Act, Competition Act, National Construction Code, and the Environment Protection and Biodiversity Conservation (EPBC) Act.

Energy and Environment

• Tax Reform: Removal of tax breaks for electric vehicles and the abolition of the Safeguard Mechanism and associated carbon-related taxes.

• Energy Reliability: Collaboration with coal-fired power plant operators to extend operational life-cycles with the goal of reducing electricity costs.

• Fuel Security: Doubling minimum reserves of petrol, diesel, and jet fuel to approach a 90-day supply.

• An $800 million investment in new fuel storage to provide an additional one billion liters of capacity.

• Extension of the Fuel Security Services Payment to companies constructing new refineries.

National Security and Border Control

• Strategic Planning: Development of a National Security Strategy and the appointment of a dedicated National Security Adviser.

• Defence Spending: A commitment to allocate at least 3 per cent of GDP to the defence budget.

• Immigration Enforcement: The processing and deportation of approximately 70,000 individuals identified as overstayers without legal residency status.

Social Services and Corporate Governance

• Welfare Eligibility: Restricting access to the NDIS and 17 welfare programs – including JobSeeker, Youth Allowance, and the Family Tax Benefit – exclusively to Australian citizens.

• Corporate Subsidies: Termination of government funding and subsidies for foreign technology companies.

[Related: Government to reform housing tax]